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Rising regulatory costs are forcing banks of all shapes and sizes to take a hard look at consolidation, including the mostly dormant field of mutually owned banks.
July 11
In an effort build scale and improve efficiency, Haverhill Bank in Massachusetts has struck a deal to merge with Economy Co-operative Bank in Merrimac.
The deal, announced Thursday, would combine two mutual thrifts that were established in the late 19th century. Haverhill Bank, with $254 million of assets, has six branches in its namesake city and Economy has $24 million of assets and one office in its headquarters city. Because both are depositor-owned thrifts no money would change hands.
Though mergers between mutuals are rare, more and more of these depositor-owned thrifts are seeking out mergers as a way to better compete with larger banks. Two other Massachusetts mutual thrifts, Salem Five Bank and Stoneham Savings Bank, announced plans to merge in July and industry experts say other such combinations are in the works.
In a news release, Haverhill Bank President and Chief Executive Officer Thomas L. Mortimer, said, "I can't think of a more logical and mutually beneficial combination of strengths as this merger. Both banks are well capitalized, operate under similar charters and are located in adjacent communities."
The deal is expected to close by the end of the year. Mortimer would become CEO of the newly combined bank and Economy's CEO, Gary B. Gozycki, is expected to retire.
The combined bank, which would retain the Haverhill name, does not plan layoffs or branch closings.
